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France PMI Manufacturing rose from 42.1 to 43.2 in January. PMI Services fell from 45.7 to 45.0. PMI Composite fell from 44.8 to 44.2.

Norman Liebke, Economist at Hamburg Commercial Bank, said the PMIs show a “depressing picture overall”. According to the bank’s nowcast model, the economy is likely to “stagnate” in Q1, and “risks are to the downside.

Liebke added that “most probably, the ECB won’t start cutting rates in the next few months amid surging wages” He further explained that rising input prices, particularly due to higher wages, support the ECB’s cautious stance on reducing interest rates. Businesses in France have been largely successful in transferring these increased costs to consumers, as evidenced by the rise in selling prices, especially in the labor-intensive service sector.


Full France PMI release here.

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